A lot of personal finance blogs reveal their author’s entire financial picture; so that you can follow them on their quest and help them achieve their goals. I’m not going to give that much information but I think that in order to help me improve my budgeting system, I have to reveal it to the world and have the world poke holes. We’ll track it back to the start of the year. I’ll also give you a look into my 401k as well, percentages of course. In future posts in this category, Financial Outlook, it won’t be quite as verbose as this one.

Expenses

Jan.

Feb.

Target %

Rent

18.66%

18.66%

20%

Utilities

3.87%

5.12%

5%

Meals

4.10%

10.25%

7%

Groceries

2.50%

7.54%

7%

Clothes

0.35%

1.47%

0.5%

Cleaning

0.42%

0.00%

0.5%

Automotive

30.01%

0.00%

2%

Transportation/Gas

5.90%

7.23%

7%

Recreation

4.79%

13.44%

10%

Other

12.84%

0.00%

3%

Savings

16.56%

36.28%

25%

Budget Reserve**

-

-

13%

* These percentages are calculated against my post-tax income, which already has 20% contributed to my employer’s 401k plan.
** Budget Reserve is simply my safety blanket in the budget for overruns. 13% seems like quite a bit but any excess falls into Savings!

Budget Notes:Automotive (Jan): Last December, I was in an unfortunate car accident that totaled my car (2000 Acura Integra) at no fault of my own. So I had to purchase a new (used) car, which was a 2003 Toyota Celica, from a private owner in Florida with the insurance company’s funds. But, that also meant I needed to purchase four new all-season tires (since Florida cars don’t know of seasons) which set me back in the Automotive category. Usually that category is very small, consisting of oil changes. I also had to get the tint removed to pass inspection, a $100 ding.Other (Jan): Usually the Other category is also pretty small too, I try to put anything I spend in a category other than Other. I made a donation to the American Cancer Society and I couldn’t really justify putting it anywhere so it went into Other.Meals (Feb): 10% is far too much to be spending on Meals. I usually try to keep this somewhere under 7% (achieved in January) and I’ll have to bring lunch to work more often.Recreation (Feb): I took a nearly weeklong trip for Mardis Gras and a weekend trip to Seven Springs ski resort. I’m allowed to take vacations!

I don’t really restrict my spending to a dollar amount but I do try to keep things in range of percentages I feel comfortable with. I want to save at least 20% of my income, 30% if possible, and I trim where I find it easiest to trim. Sometimes aberrations (like Automotive in January) are unavoidable, that’s when the Budget Reserve comes into play. Hopefully overruns don’t exceed 13% and starts to dip into the real reserve, my emergency fund.

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My comment relates to your amount of savings going into your 410k. Yes, everyone says you should max out your 401k, however does it make sense to put all that money into an account that you will eventually have to pay taxes on?

A theory that I believe in as strongly as I believe in the Easter Bunny (he IS REAL people) is Roth IRAs. I would be more focused on maxing out your Roth (or establishing one like yesterday) rather then your 401k. If you can do both then more power to you, if you have to sacrifice your 401K to do so then do it.
But these are just my thoughts….

My 401K isn’t maxxed (but close), but I find that it’s easier to put a higher percentage at the beginning of the year and pare it back if I find that I’ve been “lucky” with regard to bad money situations.

Had a thought about your budget category dilemma when you gave the Cancer Society donation…why not have a budget category for “Giving”? You are a frugal person and are wisely investing your savings. But perhaps you would end up more fulfilled in life if you were also passing on some of your finances to worthy causes on a regular basis.

My husband and I are committed to a lot of the savings principles you seem to share, but long ago we began giving at least 10% of our income to our church or other charities. We do it out of gratitude to God for what he has given us, but I believe it is a good practice for everyone to give out of what they have been given. I have never heard of ANYONE who has had the practice of giving 10% or more (known as “tithing” in Christian circles) who has ever regretted it. To the contrary, I have heard many stories about how far the remaining 90% has stretched. You have seen that you can “live on less” while contributing to your savings. Why not also experiment with asking God if there are things outside of yourself that you are meant to contribute to on a regular basis?

soe,
An excellent point and when I learned about the allowance practices of a few other personal finance bloggers (link) I was pleasantly surprised. Charitable giving is something that should be part of everyone’s life and should be instilled at an early age. It’s also important to recognize that you don’t take your bank account to the grave.

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